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UPDATE 1-Florida OKs Progress request to build nuclear units

(Updates with background)

NEW YORK, July 15 (Reuters) - The Florida Public Service Commission on Tuesday approved Progress Energy Inc's PGN.N request to build two nuclear power reactors in Levy County, a spokeswoman for Progress said.

The spokeswoman said Progress would issue a release later Tuesday.

Progress has said it plans to file with the NRC this summer to build two of Toshiba Corp's 6502.T Westinghouse 1,100 MW AP1000 reactors in Levy County near its Crystal River nuclear power plant.

One MW powers about 300 homes in Florida.

In past releases, Progress has said the first new reactor could be up and running in the 2016-2017 time frame. The company has estimated it would cost about $14 billion for the plant and another $3 billion for the necessary transmission upgrades.

In April, the company agreed with Westinghouse and The Shaw Group Inc SGR.N to buy the long-lead-time materials for up to two AP1000 reactors.

Progress submitted a filing with the state PSC in March outlining its need for additional electricity and proposing to meet that need with two nuclear reactors at Levy.

Progress Energy owns and operates more than 21,000 MW of generating capacity, markets energy commodities, and transmits and distributes electricity to more than 3.1 million customers in the Carolinas and Florida. (Reporting by Scott DiSavino)